Allows corporation business tax and gross income tax credits
to businesses providing employment to certain National Guard or reservists.

CURRENT VERSION OF TEXT

As introduced.

An Act
allowing a credit against the corporation business tax and the New Jersey gross
income tax to businesses employing National Guard members and reservists,
supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New
Jersey Statutes.

Be It Enactedby the Senate and General Assembly of
the State of New Jersey:

1. a. A taxpayer shall be
allowed a credit against the tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5), in an amount equal to 20% of the salary and wages paid by
the taxpayer during the privilege period for the employment of a qualified
employee but not to exceed $2,000 for each qualified person for the privilege
period.

b. As used in this section:

"Qualified employee"
means an employee, who is also a member of the National Guard or of a reserve
component of the Armed Forces of the United States, receiving orders for
mobilization to active duty service.

c. The amount of the credit
applied under this section against the tax imposed pursuant to section 5 of
P.L.1945, c.162, for a privilege period, when taken together with any other
credits allowed against the tax imposed pursuant to section 5 of P.L.1945,
c.162, shall not exceed 50% of the tax liability otherwise due and shall not
reduce the tax liability to an amount less than the statutory minimum provided
in subsection (e) of section 5 of P.L.1945, c.162. The priority in which
credits allowed pursuant to this section and any other credits taken shall be
as determined by the Director of the Division of Taxation. The amount of the
credit otherwise allowable under this section which cannot be applied for the
privilege period due to the limitations of this subsection or under other
provisions of P.L.1945, c.162 may be carried over, if necessary, to the seven
privilege periods following the privilege period for which the credit was
allowed.

2. a. A taxpayer shall be
allowed a credit against the tax otherwise due for the taxable year under the
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an
amount equal to 20% of the salary and wages paid by the taxpayer during the
taxable year for the employment of a qualified employee during the taxable year
but not to exceed $2,000 for each qualified person for the taxable year.

b. As used in this section:

"Qualified employee"
means an employee, who is also a member of the National Guard or of a reserve
component of the Armed Forces of the United States, receiving orders for
mobilization to active duty service.

c. The amount of the credits
applied under this section for a taxable year, when taken together with any
other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et
seq., shall not exceed 50% of that amount of the taxpayer's liability for tax
for the taxable year that bears the same proportional relationship to the total
amount of such liability as the amount of the taxpayer's gross income, derived
from New Jersey sources and attributable to the business or professional
activity in which the taxpayer employs the qualified employee during that
taxable year, bears to the taxpayer's entire gross income for that year.
Credits allowed pursuant to this section shall be taken only after the taxpayer
has taken all credits allowed under section 2 of P.L.2000, c.80 (C.54A:4-7).
The amount of the credit otherwise allowable under this section which cannot be
applied for the taxable year due to the limitations of this subsection may be
carried over, if necessary to the seven taxable years following the taxable
year for which the credit was allowed.

d. A partnership shall not be
allowed a credit under this section directly, but the amount of credit of a
taxpayer in respect of a distributive share of partnership income under the
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be
determined by allocating to the taxpayer that proportion of the credit acquired
by the partnership that is equal to the taxpayer's share, whether or not
distributed, of the total distributive income or gain of the partnership for
its taxable year ending within or with the taxpayer's taxable year.

3. This act shall take effect
immediately, and sections 1 and 2 shall apply respectively to privilege periods
and taxable years beginning after enactment.

STATEMENT

This provides for corporation
business tax and gross income tax credits to businesses that have employees who
are also members of the National Guard or a reserve component of the Armed
Forces of the United States and receive mobilization orders for active duty
service.

The amount of credit shall be
equal to 20 percent of salary but not to exceed $2,000 for each qualified
employee.